Non-compete agreements are a common practice for businesses. They help protect your business from intellectual property infringement and problems due to confidential business information leaks.
Are non-competes still valid today?
Businesses can continue to enter and enforce non-competes despite the Federal Trade Commission’s attempt to ban them. In August 2024, a Texas federal judge blocked the FTC rule banning non-compete agreements. However, the FTC may still address non-competes they find unfair on a case-by-case basis.
Elements of a valid non-competition agreement
You need to meet three requirements to enforce your non-compete in Mississippi. The agreement or clause should indicate a reasonable:
- Duration or period enforcing the agreement
- Geographic location or area scope of the agreement
- Type of work prohibited
What does “reasonable” mean?
In general, what is “reasonable” will depend on the industry and person’s duties. A rank-and-file employee may have a lenient non-compete. However, a high-level executive or someone who knows more sensitive company information might have a stricter one.
A reasonable geographic scope typically means staying within the immediate area your company operates or where the employee worked. Meanwhile, a reasonable duration often translates to around two years. Some periods may go beyond, depending on the company or industry.
Non-compete restrictions in Mississippi
In addition, Mississippi has other regulations and restrictions in place regarding the validity of non-compete agreements:
- Non-competes are generally unenforceable for low-wage employees.
- Non-compete clauses shouldn’t prevent anyone from working in their chosen profession or from working in the whole industry.
You have a higher likelihood of enforcing a non-compete if you provide consideration. Offering a bonus or a robust severance package can help offset some restrictions they may face while job hunting. However, these aren’t always required.
Legal guidance is key for any contract
Non-compete agreements are legal contracts. To ensure your non-compete agreement is binding, it is best to work with an experienced business law attorney when drafting one. A legal professional can help ensure your non-compete agreement is enforceable and effectively protects your business.
